Mayor Don Guardian and Atlantic City legislators submitted a proposed financial recovery plan that was a 125 pages long outlining what the beleaguered city plans to do in the next 5 years to reduce its $500 million debt and increasing funding for its growing budget.
One of the points highlighted in the proposal is that Atlantic City will pay the Borgata Casino $103 million out of the $150 million debt it owes. The Borgata casino contested this settlement claim stating it had not made any agreement with Atlantic City officials to settle for $103 million.
The Borgata Casino is the biggest tax payer in the city and had earlier challenged its property tax assessments in a court of law which it won and as a result Atlantic City was ordered to payback $150 million in back taxes. Atlantic City was unable to do this as it did not have sufficient funds. One of the main reasons why Atlantic City has suffered financially is due to the collapse of its once lucrative casino industry.
Five out of the City’s twelve casinos have now been closed and the remaining eight casinos are facing stiff competition from neighboring out of state casinos. As a result, the Borgata Casino stopped paying its quarterly tax payments and had so far saved around $23 million.
According to blog report on philly.com, Joe Corbo, general counsel for the casino said “Borgata has had an ongoing dialogue with City and State representatives this year in an attempt to reach a fair and equitable settlement. In those meetings we have repeatedly expressed our willingness to compromise the amount due to Borgata. Once the City submits its fiscal plan and reaches consensus with the State, we look forward to resuming our settlement negotiations and putting this matter behind us”
However Mayor Don Guardian played down Borgata’s remarks stating that he was confident the deal would go through once New Jersey approved the proposal. The Atlantic City proposal states that it will repay the Borgata within a 90 day period and will also allow the casino another $8.5 million in property tax credits for the final quarter of 2016.
The proposal does not impose any tax increases on its residents during the next 5 years stating that they had been burdened with enough tax increases and should not have to bear the city’s troubles any longer. Mayor Don Guardian remains confident that the proposal will enable Atlantic City to raise a total of $72.9 million in the next 5 years.
New Jersey Governor Chris Christie gets five days to review the proposal and make a final decision to reject or accept the plan. If Christie decides to reject the plan, it would allow New Jersey to take over Atlantic City in a bid to turn the almost bankrupt city.